Friday, June 5, 2015

Stephen Moore Declares a North Carolina Miracle

the unemployment rate started to decline rapidly and job growth climbed. Not just a little. Nearly 200,000 jobs have been added since 2013 and the unemployment rate has fallen to 5.5% from 7.9%. There is a debate about how many of North Carolina’s unemployed got jobs and how many dropped out of the workforce or moved to another state. But the job market is vastly improved and people didn’t go hungry in the streets.

Moore wants to claim employment has soared and he says there was a “debate” about how many people dropped out of the workforce.
Paul Krugman addressed this last year:

because employment in North Carolina hasn’t actually shown any upward bump. Here’s employment in NC and the nation as a whole … There has been a sharp drop in the NC labor force, probably in large part because workers who could no longer get unemployment benefits — which require that you search actively for work — gave up on what they knew was a hopeless quest. The point is that to the extent that there has been a distinctive drop in North Carolina’s measured unemployment rate, it has to do with reduced job search rather than increased employment.

Krugman’s graph document the decline in the labor force after the reduction in unemployment insurance benefits. And Moore wants to say there was a debate? If we go back to February 2008 and graph employment in North Carolina, the net increase has only been 57 thousand not 200 thousand. So there has not been a miracle increase in North Carolina. Average hourly earnings of all employees in North Carolina has increased from $21 an hour in 2010 to $21.85 as of April 2015. A 4 percent nominal increase over a 5 year period is below what we have seen on a national level. This does not sound like an economic miracle at all. I guess the Wall Street Journal will publish even the dumbest of dishonesty.

2 comments:

"Average" wages are greatly skewed by high-income earners (say there are two people in the labor force, and one earns 10k a year and the other earned 10 million a year).

A "median" wage (hourly, weekly, annual) would be a better measure, as it shows where the real middle is. I'd bet it would be very hard (for the vast majority of people) to find a job for $21 an hour in North Carolina or anywhere else in the U.S.

According to wage data from Social Security, the "median" wage in the U.S. is $28,031 a year.http://www.ssa.gov/cgi-bin/netcomp.cgi?year=2013

The St. Louis Fed says the median weekly wage is $341 a week (less than what the SSA reports).http://research.stlouisfed.org/fred2/series/LES1252881600Q

But the BLS reports: "Median weekly earnings of the nation's 107.2 million full-time wage and salary workers were $808 in the first quarter of 2015.http://www.bls.gov/news.release/wkyeng.nr0.htm